How Tantalum Competes in Global Markets
11.13.2013 // Dennis M. Zogbi // Passives
Introduction to Global Tantalum Material Consumption:
In CY 2013 Paumanok Publications, Inc. estimates that approximately four million pounds (avoirdupois weight) of tantalum materials will be consumed in the global market, a low point in both the supply and demand for this unique and important metal. At the point of sale, more than half of the tantalite is converted into engineered powder, while the majority of the remainder is sold as metallurgical products and a small amount is consumed in fine chemicals for laboratory and special industrial usage (according to Paumanok estimates).
Competition Among Industries for Tantalum Metal:
Competition for tantalum by industry can be intense because of its narrow supply chain, of the four million pounds consumed in 2013, about 50% of demand will be dictated by the electronics industry; primarily in the form of anode for capacitor and in the form of semiconductor targets which are sputtered to form a diffusion layer for use in the semiconductor manufacturing process. The remaining 50% of tantalum demand comes from industries that are niche and fragmented but collectively quite significant; and include alloy additives, industrial processing, cemented carbides, fine chemicals and some additional specialty product lines.
The Challenging Supply Chain:
Over the past 36 months, key hard and soft rock mining operations for tantalite have been either idled or permanently closed in Australia, Canada, Mozambique and Ethiopia; leaving the majority of demand to be satisfied by artisanal sources in South America and Central Africa; from recycled metal or from existing stockpiles throughout the supply chain. This scenario creates a balanced supply chain, only in weak economic conditions, however, any sudden upturn in the global economy, an upturn impacting both the professional electronics markets and the metallurgical end-use segments, would place a strain on the supply chain, and upset the delicate supply/demand balance currently in place. Any supply chain disruption resulting from an increase in demand from an improving global economy would create competition for tantalum among the following end-use market segments-
Competing Technologies for Tantalum in Electronics:
In each industry where tantalum competes, there are alternatives to the metal, however, the primary reason why industries use tantalum is because of its known reliability. The metal has been in continuous use for decades in multiple industries and its performance and behavior is well documented.
Future Outlook for Tantalum in Electronics:
Due to the high percentage of tantalum materials consumed globally in capacitor anodes, the future health of the tantalum supply chain is largely dependent upon the ability of the tantalum capacitor to move its technology forward. A detailed look at the structure of primary and secondary raw material supply to the end-markets which consume tantalum, in both electronics and metallurgical products, makes the researcher realize that the entire supply chain is dependent upon the mutual success of its various segments- that the sum of its parts is truly responsible for the long-term success of the whole. This is why the continued success of the tantalum capacitor, being the largest tantalum material consumer, is so important in the coming years.
Summary and Conclusions:
Electronics are the primary market driver for tantalum and we expect its continued use in both capacitor anode and as a diffusion layer in semiconductor manufacturing. Tantalum capacitors, the major driver for tantalum materials, will continue to be needed in the high tech economy especially in mission critical circuits where known reliability and volumetric efficiency are key criteria in component selection. And this will be supported by decades of data that supports its performance as a capacitor in a circuit. Also, the niche that tantalum occupies in the 100 to 1000 microfarad range is formidable, and advances in tantalum powder technology will extend the available capacitance range deeper into the electrolytic range, while pushing the envelope on capacitance within each individual molded chip case size. Tantalum will remain a cyclical business and understanding that can help individual companies within industries plan for and profit from the changes in the market over time.
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